Why is Real Estate in Resort Communities Booming?

What do these cities have in common?

Lake Arrowhead, California

Highlighting Bozeman, Montana Real estate

In Montana, the Washington Post recently described the increase in home buyer demand as a property Gold Rush.  “The median price of a single-family home around Bozeman vaulted $94,000 from July to August, to $710,000, according to the Gallatin Association of Realtors, which tracks sales in the city of 52,000 and the surrounding valley, the state’s fastest-growing region.”***. 

Journalists have coined the term “Zoom town“, a clever play on our classic boom town, but they are boomtowns nonetheless.**

Why Are Resort Communities Booming?

So why are resort communities booming? Aren’t we in a pandemic? Why are people purchasing luxury homes? Why are people purchasing in resort communities when that price is not necessarily lower than local sales prices? 

To set the groundwork, not all Americans can afford to purchase in resort communities. These luxury homes are being purchased with the ability to purchase (i.e. still working or with heavy savings or financial stability). For a country that has been officially in a recession since June 2020, it seems odd that the luxury real estate market is booming*. A question for another time is whether luxury real estate always does well in recessions or whether this boom is an anomaly. 

“We are seeing greater sales gains in more expensive properties in areas people consider to be retirement destinations and resorts,” said Lawrence Yun, chief economist for the National Association of Realtors (NAR). ****

5 Reasons Why Resort Towns are Booming

What are some of the reasons people are purchasing in resort towns?

1. Work from home –

If you can work remotely from your tiny apartment in downtown LA or San Francisco, or lake view with enormous windows and a deck, which would you choose? When workers do not have to be in the office, they choose a different “home” to work from

2. Escapism –

Cities are bustling with opportunities, events, and culture….usually. When events and entertainment are shut down, a big metropolitan area can be more gloom than glam. The fresh air, new environment, and sweeping vistas of resort communities is a welcome escape to the city life and boarded up shops of downtown

3. Back up plan –

If you are close to retiring, why not buy where you would like to retire and split time until you do? Not only this, social unrest, politics, and an uncertain future in many cities make it appealing to have a back up plan out of state. Not to mention that the influx of people in these resort communities is creating opportunities for jobs and businesses, from renting kayaks in Big Bear, hunting lessons in Big Sky, or a round of golf in Palm Springs.

4. Space –

If Southern Californians learned one thing this year, then it might be that having a 3 bedroom, 2 bathroom house, with 4 kids and both parents working from home is not a viable option in this age of distance learning and COVID lockdowns. Space and room inside and outside are extremely desirable. And if you can’t afford space locally, then space might become a bigger priority than location. 

5. Affordability –

Southern California, the Bay Area, and other metropolitan areas are known for their unaffordable housing. When given the choice to buy a small condo in Irvine or a spacious, luxury cabin in Big Bear, you might choose the $600,000 property in Big Bear for 3,000 square feet and a high end kitchen. Interest rates are giving home buyers more purchasing power, but when the list price is still out of budget, then many home buyers who are indefinitely working from home opt for the big house, 2 home offices, and a separate school room for the kids. Renters who might be sharing their space with multiple roommates are also in search of space to work and live indoors. 

Interested in discussing this phenomenon more or sharing your thoughts? Give us a call at 626-609-2130 or contacting us today! 

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Homes For Sale in Lake Arrowhead, CA

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